Car insurance price hikes hit Scotland the hardest

Drivers in the UK have experienced car insurance premiums rising substantially across the board during the first quarter of 2017, and there’s no exception for Scottish motorists.

According to the latest Confused.com car insurance price index, powered by Willis Towers Watson, drivers in Scotland have been hit harder than anywhere else in the UK, with its regions seeing the biggest annual price hikes.

But it seems drivers in the Scottish Highlands & Islands region have seen the biggest increases to their car insurance of late. Here the price of a typical annual comprehensive car insurance policy has soared 21% over the last 12 months. This is the highest yearly percentage increase of any region in the UK.

This steep rise means, on average, drivers in this region are paying an extra £102 for their premiums compared to the same time last year, with the average cost of an insurance policy now sitting at £594.

Meanwhile, drivers in East & North Eastern Scotland have also been hit with steep hikes in the cost of their car insurance. Prices here have risen 20% over the past year - the second highest rise of any UK region. This takes average premiums in this area to £568 in Q1 2017, up £96 from the same time last year.

Despite the rises, drivers in both the Highlands & Islands and East and North Eastern regions still don’t tend to pay as much as those living in Central Scotland. Motorists here typically spend £629 for an annual car insurance policy – making it the costliest region in Scotland.

Meanwhile, motorists in another region of the country - the Scottish Borders - have seen the cost of their car insurance rise most over the past three months. Here, drivers have seen a 3% quarterly increase, which is equivalent to an extra £16 on the average premium. This is both the biggest monetary and percentage quarterly increase of the four Scottish regions. And it brings average premiums to £547, up from £531 in Q4 2016.

However, even though prices have risen, drivers in the Scottish Borders still pay the lowest average premiums of any region in the UK. Motorists in this region can expect to pay £713 less on average than drivers in Inner London – the most expensive region in the UK - who can expect to fork out £1,260 per year.

Looking across Scotland, Aberdeen has seen the largest increases of Scotland’s four most populous cities. Prices here have risen £117 (24%) year-on-year. This compares with a £93 (20%) yearly rise in Dundee, £109 (19%) in Glasgow, and a comparatively low £86 (£18%) rise in Edinburgh.

Despite the price increases, drivers in Scotland still tend to pay less than the UK average when it comes to car insurance.

According to the price index, drivers across the UK are now paying £781 for the average comprehensive premium - 16% higher than the amount they were forking out last year. And with premiums up 2% (£14) since the last quarter, the data suggests the amount drivers pay for their car insurance is on its way to peaking.

Motorists across the UK are now paying just £77 less than the highest ever average premium of £858 which was seen in Q2 2011. And, due to extra pressures imposed on the insurance industry, it’s likely car insurance prices will shift up a gear and pass the £1,000-mark next year.

These pressures include the Ogden rate cut which will see insurers paying out more for personal injury claims1, and an increase to 12% for Insurance Premium Tax (IPT) in June2. And coupled with hikes in road tax for new cars3 and petrol prices rising 5p to 120.1p/l since the start of 20174, it’s likely that many drivers will feel the cost of motoring burning a sizeable hole in their pockets.

Amanda Stretton, motoring editor at Confused.com says: “Drivers in Scotland, as across the rest of the UK, are seeing car insurance prices accelerate and there seems to be no signs of slowing. With prices having risen up to 21% annually in some regions, the average driver could now be paying over one hundred pounds more than they were paying this time last year, depending on which part of the country they live in.

“And as the industry adapts to additional pressures, such as the drastic Ogden rate cut and the hike in IPT to 12% from June this year, we could be on course reach new highs by next year.

“Thankfully, insurers are now required to show drivers their premium from the previous year at point of renewal. So being able to compare the amount they paid in the previous year and armed with the knowledge that prices are rising across the board, motorists should be more inclined to shop around.

“To get the best deal drivers should take note of their renewal price and run a quote through a car savings site, such as Confused.com, to see if they can get a cheaper car insurance premium elsewhere.”